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The fallacy of the argument that low wages give Japan an unfair advantage in international trade was exposed at Wednesday's International Seminar forum on the Problems of East Asia.
The speaker, Masaya Miyashi, a member of the Research Department in Tokyo's Federation of Economic Organizations, stated the following criteria must be taken into account when deciding whether the workers of a country are adequately compensated for their labor: the country's degree of development, the type of natural resources with which it is endowed, and the purchasing power of the wages received.
More advanced nations pay their workers higher wages, but the products they produce and their methods of production are different from those of underdeveloped countries. These areas must devote their resources to agriculture, the sector of the economy where new productivity is lowest. Also, since capital is very expensive in economically backward areas, methods of production will be labor rather than capital intensive. Many more hours of human effort are required to produce the same quantity of a good, because mechanical aids are not as prevalent.
The above statements also refer to the second criterion, the wide divergence of resources endowments between difficult countries. Japan has almost no natural resources. All the requirements of modern civilization, from food and fibre to coal and iron ore, must be imported. The costs of raw materials are higher for her than for the United States and Western Europe. Her capital resources are much smaller. The average American laborer, with ten times as much equipment to work with, produces six times as much as his Japanese counterpart. It is evident that Japanese industry cannot afford to pay the same wages to its workmen as can American industry, with its different and richer endowments.
The third criterion will serve to provide a true comparison between wage levels in Japan and other areas of the world. Figures are often seen which give average wages in different countries in terms of U.S. dollars. According to these statistics the average Japanese laborer receives a paycheck one-eighth the amount of that given to an American and one-third the amount given to a British worker. But this comparison is unfair. The real truth lies in the sum of goods and services the Japanese laborer can acquire with his wages, in terms of real returns, compensation in Japanese export industries is equal to that given in Western Europe and one third of that paid in the United States.
If an objective view is taken, Mfyoshi states, there is no reason for discrimination against Japanese goods on the grounds that they are produced with cheap labor.
According to the next speaker, Joonkyu Park, a member of the Korean national assembly during the second republic, the new military government is not as oppressive as the old Rhee government.
He stated that the new regime has been accepted by the people, not as a rejection of democracy, but in the words of the leader of the governing junta, as a "necessary evil to rebuild sound democracy and stronger freedom."
It is true that the officers of the second republic had been elected by the people and were pledged to maintain Korean democracy. It is true that they tried to fulfill their pledge. The fault and the tragedy of the second republic was that they tried too hard. The government, in its desire to maintain a state of virtually absolute freedom, abdicated its role of leadership.
The result of this abdication was the destruction of the second republic. The military coup of May 16, 1960 did not mark the end of Korean democracy, the real end of Korean democratic government was the day that the mob had been allowed to invade the national assembly and had forced it to enact retroactive laws.
Mr. Park then told the audience that the leader of the present government, General Park, to whom he bears no relation, is not a Castro, not even a DeGaulle, and that he will keep the promise made upon the day of the Coup, to return democratic government to Korea within two years
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